PROJECT delays have caused a drop in the funds disbursed by funding agencies for government projects under official development assistance (ODA) from January to December last year, according to the National Economic and Development Authority (Neda).

This was part of the results of the 16th ODA Portfolio Review released by the Neda Project Monitoring Staff. The report showed the government disbursed a total of $1.948 billion for 130 loans in 2007, 1 percent lower than the $1.974 billion for 141 loans in 2006.

“CY 2007 financial performance was generally good. There were noted improvements for all indicators except the disbursement level,” the Neda report said.

The Neda said a 14-percent decrease in the disbursement level of project loans caused the decline. Total disbursement for project loans went down to $1.055 billion in 2007 from $1.225 billion in 2006.

This is contrary to the disbursement level for program loans, which increased by 20 percent to $893 million in 2007 from $750 million in 2006.

Meanwhile, the disbursement rate, or the pace at which the government releases counterpart funding for ODA-funded projects and programs, has increased to 86 percent in 2007 from 80 percent in 2006.

The Neda said that while the disbursement rate for projects funded by the Japan Bank for International Cooperation (JBIC) and World Bank (WB) increased, disbursement rates for Asean Development Bank (ADB)-and other donor-funded projects decreased by 7 percentage points and 15 percentage points, respectively.

“Factors cited by implementing agencies for [disbursement] rates below 50 percent were delays in the procurement and processing of contracts/subproject preparations and award of contracts; delays in submission/processing of documents to effect disbursements; low demand for relending facility; delayed acquisition of right-of-way; delayed issuance of notice of proceed; and failure in bids,” the Neda said.

With this, the disbursement ratio of actual disbursements to the net loan amount for 2007 increased to 39 percent, only 3 percentage points higher than the 36 percent recorded in 2006.

The government’s loan balance for 2007 was pegged at $4.961 billion. The ADB recorded the highest disbursement ratio of 62 percent, followed by other sources at 39 percent, the JBIC with 36 percent and the WB at 32 percent.

Meanwhile, the total loans portfolio of the country in 2007 amounted to $9.746 billion covering 130 loans composed of 119 project loans worth $7.575 billion, or 78 percent of the total, and 11 program loans worth $2.171 billion, or 22 percent of the total.

“The portfolio review covered 89 grant-assisted projects consisting of six new projects, 71 ongoing and 12 completed projects. [Around] 63 projects have a total grant amount of $723.32 million,” the report added.

Of the 130 loans, 103 were for ongoing projects, which includes nine  loans that are newly effective, 22 closed loans worth $1.955 billion  and five signed but not yet effective.

The Neda said newly signed loans and/or loans made effective during the year reached 14 worth $1.654 billion in 2007, higher than the 13 loans in 2006 worth $859 million.

There were also partial loan cancellations made by the government in 2007. This was largely due to excess funds or funds left unused upon loan closure, which are returned to donor agencies after project completion.

The reasons cited for partial loan cancellations were unutilized budgets upon loan closure worth $98.75 million; excess financing due to foreign-exchange rate movement, $8.23 million; changes in financing mode, $11.78 billion; and reduction in scope, $8.23 million.

On  the other hand, the infrastructure sector remained the country’s biggest recipient of ODA loans accounting for $5.532 billion or 57 percent of the total for 61 loans.

The second-largest is the agriculture, agrarian reform and natural resources sector with 30 loans worth $1.672 billion or 17 percent of the total.

Meanwhile, the JBIC is still the biggest source of ODA loans, which accounted for 37 percent or $3.646 billion of the total by funding 46 loans.

Loans from China also increased to 11 percent in 2007 from only 5 percent in 2006. This accounted for $1.110 billion of the total for six loans, higher than the $460 million recorded last year for three loans.

PROJECT delays have caused a drop in the funds disbursed by funding agencies for government projects under official development assistance (ODA) from January to December last year, according to the National Economic and Development Authority (Neda).

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